Procurement Policy

A. Purpose

This document sets out the policy of Toyota (GB) PLC (“TGB”) regarding the purchase of goods and services. It applies to all staff including employees and contractors.

Our policy is to seek the purchase of goods and services from suppliers that enhance positive impacts on the environment and society whilst meeting our business requirements. By incorporating social, environmental and ethical considerations into procurement decisions we endeavour to make a positive contribution to the environment and society.

B. About this policy

(b) allocate funds for the effective direction, implementation and continuous improvement of this policy;

(c) measure and monitor the application of this policy;

(d) review this policy at least once every two years; and

(e) conduct an environmental, social and ethical assessment of relevant suppliers. It is understood that all organisations that we do business with must comply with relevant national and international regulations. In the event of any conflict between those laws and this policy, then the provisions that give the greatest level of protection should be applied.

No individual who works for TGB may commit the company to any form of financial expenditure unless they follow this policy.

C. Knowing our supply chain

TGB has an obligation to be aware of the working conditions and other practices used within our supply chain. It is our policy to carry out an appropriate level of due diligence, relating to the financial status and the other factors outlined below in this document, on all business partners. This must always be completed before any new supplier is engaged.

D. TGB’s Commitment

This policy sits within our established procurement practices that ensure a fair and transparent procurement process that operates in line with all applicable laws and regulations. To ensure that this policy works adequately, TGB will:

(a) work collaboratively with suppliers to improve environmental, social and ethical standards;

(v) selecting the supplier/s that offer the best fit with all selection criteria.

(b) Credit checks will be run against potential suppliers to ensure TGB is aware of trading history and their ongoing viability as a business.

(c) When selecting suppliers TGB may request certain information and documentation. We may also require suppliers to register with our preferred due diligence portal to allow effective checking of all suppliers to be completed. Weighted selection criteria include quality, financial viability and sustainability.

(d) TGB standard terms and conditions will be entered into with suppliers, as a minimum requirement. For any transaction above £30,000 a full legal agreement, rather than standard form terms and conditions, should be used between the parties. TGB’s Procurement and Legal & Compliance departments will advise on which agreement is to be used.

F. Expectations of our suppliers

TGB expects that all of our suppliers adhere to the following principles. All suppliers should:

(a) have management systems in place to enable compliance with all relevant legal requirements and this policy in their own operations and those of their supply chain;

(b) comply, at all times, with all relevant international labour conventions;

(c) communicate their expectations for compliance on the issues covered in this policy to all relevant employees and suppliers;

(d) provide evidence, upon reasonable request from TGB, to enable assessment of their compliance with this policy; and

(e) demonstrate continuous improvement in their approach to sustainable and responsible purchasing.

G. Importance of working conditions

TGB does not use or accept any forced, bonded, involuntary or child labour. We will only ever work with people that choose to work freely. We respect the right of everybody to equal opportunities and insist that all business partners meet our own standards. We expect our suppliers and business partners to adopt and demonstrate the following minimum standards:

(a) Child Labour: Organisations should ensure the effective long-term elimination of child labour. No young person under 18 should be employed at night or in hazardous conditions.

(b) Forced Labour: There should be no use of forced, bonded or involuntary labour. No worker should ever be required to lodge a “deposit” or identity papers with their employers. All workers should be able to leave after giving reasonable notice.

(c) Health & Safety: All employees should expect to work in an environment that is both safe and healthy. Adequate steps should be taken to prevent accidents occurring in the normal course of work. All workers should receive suitable health and safety training and have access to clean toilet facilities and clean drinking water as required.

(d) Abuse: Physical abuse (actual or threatened), all forms of harassment, verbal abuse and any other form of intimidation are never acceptable. Disciplinary and grievance procedures must be clearly documented and communicated appropriately.

(e) Freedom of Association: All workers have the right to form and join organisations of their own choosing without prior authorisation.

(f) Working Hours: Working hours should not be excessive and shall comply with relevant national laws. Overtime should only be voluntary.

(g) Equal Treatment: Organisations will seek to eliminate all forms of discrimination in access to employment, training and working conditions.

(h) Remuneration: Wages and benefits given to workers should meet national standards. All workers should be provided with written information on their pay and conditions.

(i) Employment terms: All workers should be provided with written contracts which detail the terms and conditions of their employment in an understandable way. Work performed should be on the basis of recognised employment law and practice.

(j) Community impact: Organisations are encouraged to support the communities in which they operate through appropriate community initiatives.

H. Ethical Trading

TGB is committed to respecting the dignity, liberty and equality of everyone that we work with. This includes maintaining an interest in the business practices used by companies and business partners that supply goods or services to us.

All of our suppliers must be able to demonstrate the existence of proportionate processes and procedures to implement appropriate staff guidelines and codes of conduct. Suppliers should ensure that management systems and practices are in place to ensure the prevention of:

(a) money laundering;

(b) insider trading and market abuse or manipulation;

(c) conflicts of interest;

(d) fraud, bribery and corruption and other improper payments, gifts or hospitality; and

(e) unauthorised access to personal and business information.

I. Energy & Environment

The Toyota Group’s commitment to protecting and respecting the environment forms an important part of its Guiding Principles. We seek to ensure that appropriate attention is paid to environmental issues in the purchase of all products and services for our business. All suppliers should be able to demonstrate: